Huawei founder tells staff it faces 'live or die' moment

Ren Zhengfei outlines plans to combat US sanctions

Huawei staff have been told the company plans to go into “battle mode” to survive the ongoing US ban disruption, founder Ren Zhengfei has said.

Earlier this year, the US Department of Commerce effectively blacklisted the Chinese mobile giant on national security grounds, preventing American firms from doing business with the company.

The ruling limited Huawei’s access to important components and to the Android operating system as well as Google applications. It is a huge blow to Huawei’s bid to gain market share in the west and overtake Samsung as the world’s leading smartphone manufacturer.

Ren Zhengfei

Huawei has persistently denied any accusations of wrongdoing, while the US has never produced any evidence to support its claims that the company’s networking equipment represents a threat to national security.

In a memo to employees, seen by Reuters, Ren said Huawei would invest in production equipment to ensure business continuity, would make certain roles redundant, and give more powers to frontline staff.

“The company is facing a live-or-die moment,” the memo reportedly states. “If you cannot do the job, then make way for our tank to roll; And if you want to come on the battlefield, you can tie a rope around the ‘tank’ to pull it along, everyone needs this sort of determination!”

Ren also called on Huawei to do their best in meeting previous sales targets of around $125 billion, but admitted the company’s most recent quarterly results – which saw a 23 per cent increase in revenue despite the ban – were not reflective of the current situation. He suggested the figures were aided by sympathetic Chinese clients making payments in time.

Sanctions

Washington has offered some wiggle room, allowing Huawei to procure technologies from certain suppliers in order to serve US rural operators that use its equipment. The US government has now extended this arrangement for another 90 days, but has also added more than 40 divisions of Huawei to the ‘non-entity’ list.

The debate comes amid a backdrop of significant trade tensions between the US and China, leading some to believe the US’s actions against Huawei are politically motivated and its position could be changed should a trade deal be struck.

“It's clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security,” said a Huawei spokesperson. “Attempts to suppress Huawei's business won't help the United States achieve technological leadership. We call on the US government to put an end to this unjust treatment and remove Huawei from the Entity List.

“Today's decision won't have a substantial impact on Huawei's business either way. We will continue to focus on developing the best possible products and providing the best possible services to our customers around the world.”